Third-Party Cyber Risk Management Tools

Third-party cyber risk management is a critical aspect of modern cybersecurity, addressing the potential threats posed by vendors, suppliers, and other external entities with access to an organization's sensitive data and systems. These risks can manifest as data breaches, compliance issues, ransomware attacks, and denial of service attacks, with significant financial and reputational consequences. Tools like Bitsight, Black Kite, and SecurityScorecard offer comprehensive solutions for assessing and mitigating these risks, often utilizing the Factor Analysis of Information Risk (FAIR) model to quantify potential financial impacts. Despite the benefits, integrating FAIR presents challenges such as complexity, data gathering difficulties, and resource allocation pressures.

Third-Party Cyber Risk Overview

Third-party cyber risk can take various forms, such as data breaches, compliance issues, ransomware attacks, and denial of service attacks. These risks arise because third parties often have access to an organization's sensitive data, systems, or networks, which can be exploited by cyber attackers. Recent studies show that almost a third of third-party vendors would be considered a material risk if a breach occurred, and 80% of surveyed organizations experienced a data breach originating from a third party in 2020.

• 34% of businesses experienced cybersecurity issues in 2023, with common problems being data breaches and cyber-attacks.
• More than 90% of companies have experienced a data breach that originated within a third-party vendor.

To manage these risks, organizations must assess, identify, and remediate third-party vulnerabilities using a risk-based approach throughout the vendor lifecycle. This involves continuous monitoring, risk quantification, compliance verification, and collaboration with vendors to mitigate potential threats.

Key Features of Black Kite

Black Kite offers a comprehensive third-party cyber risk management platform that provides a holistic approach, including technical, financial, and compliance perspectives. Some of its key features include:

• Technical Cyber Rating: Provides easy-to-understand letter grades and detailed data behind 20+ risk categories.
• Risk Quantification: Uses the Open FAIR? model to calculate the probable financial impact of a cyber breach.
• Compliance Engines: Automates compliance of third-party cyber assessments with industry standards.
• Ransomware Susceptibility Index: Assesses the likelihood of a ransomware attack on third parties.
• Continuous Monitoring: Ensures that any changes in risk levels are promptly identified and addressed.
• Standards-Based Methodology: Ratings are fully transparent and based on standards, ensuring users know exactly how their findings are calculated.

Black Kite's platform boasts unmatched scalability, with visibility into over 34 million companies and covering 20+ risk categories and 290 controls.

Top Cyber Risk Management Tools

Here are some of the top cyber risk management tools for assessing and mitigating third-party cyber risks:

• Bitsight: Bitsight offers a comprehensive third-party risk management platform that provides continuous monitoring, security ratings, and risk quantification. It relies on objective, verifiable data to generate daily security ratings for vendors, allowing organizations to quickly identify and prioritize risks. Bitsight's platform enables faster vendor onboarding, improved communication of risk, and measurable risk reduction across the vendor portfolio.
• Black Kite: Black Kite conducts technical cyber risk ratings using letter grades and detailed data across 20+ risk categories and 290 controls. It quantifies risk using the Open FAIR? model, calculating the probable financial impact of a cyber breach. Black Kite also offers compliance automation, a ransomware susceptibility index, and supply chain monitoring to identify Nth-party risks.
• SecurityScorecard: SecurityScorecard provides instant visibility into the cyber risks posed by third parties. Its platform allows continuous monitoring, collaboration with vendors for remediation, and compliance tracking. SecurityScorecard leverages proprietary data and AI-powered analytics to deliver accurate security ratings and actionable insights.
• Prevalent: Prevalent's Third-Party Risk Management Platform offers managed vendor risk assessments, continuous threat monitoring, and a unified platform for automating third-party risk management workflows. It provides a 360-degree view of vendor risks and enables collaboration with third parties for remediation.
• ProcessUnity: ProcessUnity's Third-Party Risk Management solution automates vendor management workflows, including onboarding, due diligence, and ongoing monitoring. It offers pre-built integrations, customizable assessments, and real-time dashboards for tracking vendor risks.
• OneTrust: OneTrust's Third-Party Risk Management platform provides a centralized system for managing the entire vendor lifecycle. It offers automated assessments, risk scoring, and ongoing monitoring, along with built-in templates for common compliance frameworks.

These tools help organizations streamline their third-party risk management processes, gain visibility into vendor risks, and ensure compliance with relevant regulations and industry standards. By leveraging automation, continuous monitoring, and risk quantification, these platforms enable proactive identification and mitigation of third-party cyber risks.

FAIR Model Integration

The Factor Analysis of Information Risk (FAIR) model integrates with third-party cyber risk assessments by providing a structured approach to evaluate and manage risks posed by vendors and suppliers. FAIR translates cyber risks into financial terms, allowing organizations to quantify the potential financial impact of third-party cyber incidents and prioritize risk management efforts based on probable financial loss. The model emphasizes meticulous data collection and analysis, supporting the creation of detailed risk scenarios that reflect specific threats and vulnerabilities associated with third-party vendors.

Integrating FAIR with third-party risk management tools enables continuous monitoring of vendors' cyber risk posture, ensuring organizations stay updated on any changes in risk levels. Tools like Black Kite use the FAIR model to calculate the probable financial impact of cyber incidents involving third parties, translating technical risk into business terms. This integration enhances decision-making, improves communication, and optimizes resource allocation, ultimately strengthening an organization's cybersecurity posture.

Challenges in FAIR Implementation

Integrating the FAIR model with third-party risk assessments presents several challenges, including:

• The complexity of the model and the need for specialized training in risk analysis and management
• Difficulties in data gathering and analysis, which can be arduous and time-intensive, potentially leading to inaccuracies
• Resource allocation pressures, particularly for smaller entities, due to the manual implementation and upkeep of the FAIR methodology
• The potential for subjectivity and bias in risk assessments, especially without automated tools to introduce standardization and consistency
• The need for continuous updates to keep pace with the ever-changing cyber threat landscape, which can overwhelm dedicated teams

While FAIR aims to reduce subjectivity through standardized methodologies, quantitative analysis, and structured data collection, challenges such as complexity, data availability, subjectivity in inputs, resource demands, and potential biases in risk scenarios remain.

Emerging Trends in Third-Party Cyber Risk

Several emerging trends in third-party cyber risk are set to dominate 2024 and beyond. Vendor breaches will continue to rise, with Forrester estimating that 60% of security incidents in 2022 stemmed from third parties. This trend is expected to persist, with attacks becoming more sophisticated and targeting supply chains. As IoT devices proliferate, threat surfaces will grow exponentially larger, potentially leading to massive botnets capable of devastating DDoS attacks. Technology ecosystems spanning the supply chain will necessitate integrated risk management practices. Privacy laws will also take center stage, with governments and regulatory bodies increasingly focusing on third-party cyber risk management. Organizations will need to adopt a holistic approach, converging vendor and internal risks, while also considering ESG frameworks in their third-party relationships. Continuous monitoring, risk quantification, and robust due diligence processes will be critical in mitigating the evolving threats posed by third-party cyber risks.